General Motors in Dire Straits

Paper Summary:

This paper discusses the current situation in the automotive industry and General Motors' position in the overall industry. The paper discusses GM's current troubles as well as future strategies in relation to its 2004 annual statement. The paper further examines GM's future move into the China market and the possibility of a bankruptcy due to Delphi's recent bankruptcy.

From the Paper:

"The automotive industry in the US is currently under assault from several different threats simultaneously. The most obvious threat to continued sales and profitability are the increasingly high fuel prices that are exacerbating most energy related or energy-reliant industries. Siddiqi claims that lower reserves combined with higher fuel consumption could permanently raise the cost of gas (2005). Since US automotive manufacturers have long resisted the move to more fuel efficient vehicles, preferring instead to produce and market its gas guzzling SUVs, a permanent rise in fuel costs would doom that high margin product line and severely weaken an already exposed industry."

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